THE NEW ZEALAND MEDICAL JOURNAL

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1 THE NEW ZEALAND MEDICAL JOURNAL Journal of the New Zealand Medical Association Healthcare services funded by Counties Manukau District Health Board for people in the last year of life Wing Cheuk Chan, Gary Jackson, Doone Winnard, Philippa Anderson Abstract Introduction The last year of life is often associated with a high level of healthcare utilisation and cost. To date, little information is available regarding the healthcare utilisation patterns in the last year of life in New Zealand. Aim To describe the healthcare utilisation patterns and costs of the residents of Counties Manukau District Health Board (CMDHB) region in the 1-year period prior to death in Method CMDHB residents who died in 2008 were identified from the National Mortality Dataset. The health services utilisation patterns and costs in the last year of life were derived from National Minimum Dataset (NMDS), Pharmaceutical Collection, Laboratory Claims Collection, and National Non-Admitted Patient Collection via encrypted NHI linkage. Results Forty percent of all deaths in 2008 in CMDHB occurred in a publicly funded hospital. Just over 80% of people had at least one inpatient hospital stay in the last year of life. More than 75% of the healthcare costs funded by CMDHB in the last year of life were related to inpatient hospitalisations. The average cumulative length of inpatient stay over the year in the people who had an inpatient event was 20.6 days. Outpatient, pharmaceutical, and laboratory services were received by 84%, 91%, and 86% of people respectively in their last year of life. Conclusion Consistent with the international literature, this study found that CMDHB residents in the last year of life have a high level of health service utilisation. Decisions about the appropriate use of high cost health services in people towards the end of life can be extremely challenging. These decisions are resource allocation decisions as well as clinical decisions and should be based on clinical factors, cost utilities, and patient, family, and society s expectations. The last year of life is often associated with a high level of healthcare utilisation and cost. 1 5 Indeed, a disproportionate share of healthcare funding is spent in the last of life in many developed countries. 6 8 The observations from international literature suggest that providing a high level of care may not necessarily translate to improvement in health outcomes. 9 In the context of the ageing population in New Zealand, the end-of-life issues in people with chronic disease will become more common. To date, little information is available regarding the healthcare utilisation patterns in the last year of life in New Zealand. This study aims to describe the healthcare utilisation patterns and costs of the residents of Counties Manukau District Health Board (CMDHB) region in the 1-year NZMJ 27 May 2011, Vol 124 No 1335; ISSN Page 40

2 period prior to death in CMDHB covers the southern third of Auckland City with a population of around 490,000, making up around 11% of the New Zealand population. Method The routinely collected administrative datasets were sourced from New Zealand Health Information Service (NZHIS). We examined the National Mortality Dataset to identify the CMDHB residents who died in Record linkage was made via encrypted National Health Index (NHI) to the Pharmaceutical Collection, Laboratory Claims Collection, National Minimum Dataset (NMDS, inpatient hospital events ), and National Non-Admitted Patient Collection ( outpatients ). The encrypted form of NHI was used to ensure privacy and anonymity of individuals. As all datasets were entirely based on anonymous administrative data no formal ethical review was required as per New Zealand ethical guidelines. 10 The numbers of community pharmaceutical and laboratory claims, and inpatient and outpatient events as well as their associated costs were collated for the last year prior to the date of death for each individual. Each of the inpatient events was categorised into one of the diagnostic groups as per Table 1. Table 1. ICD code definitions for the inpatient diagnostic category Diagnostic category ICD codes (version 10) Cardiovascular disease (including coronary heart disease, stroke, peripheral vascular disease and heart failure) I20x to I25x, E1053, E1153, E1453, E1059, E1159, E1459, I60x to I69x, and G45x to G46x, I70x to I79x and E1050, E1051, E1052, E1150, E1151, E1152, E1450, E1451, E1152. I50x, I11.0, I13.0, I13.2 Malignant cancer C00 to C97 Chronic respiratory disease J41 to J47, E84, Z942. Chronic liver disease B18, B19, K70 to K77, I85, Q446-Q448, T864, Z944. Chronic renal failure All other causes of hospitalisation N01 to N19, N25-N29, T861, Z992, Q601, Q604, Q606, Q611, Q619 Any episode that did not have any of the other named ICD codes above in the primary or secondary diagnostic fields These diagnostic groups were chosen to determine the relative burden of these common diseases in the last year of life. Formal diagnosis coding is not available in outpatient, pharmaceutical or laboratory databases. The diagnostic category refers to the discharge diagnosis of people who had a publicly funded inpatient event within the last year of life. Both primary and secondary codes were searched for a diagnosis related to the first five categories. To avoid double counting, each hospital event was assigned with only one of the six categories listed. If a hospital event had more than one diagnosis from the first five categories then the diagnosis taken was based on the order of the hospital diagnostic codes in which they appear for the hospital event. One person may have more than one type of hospital admission during the last year of life. This means one person may be classified into multiple diagnostic categories. All cost estimates were derived from the NZHIS datasets. Total healthcare costs refer to the inpatient and outpatient events (including ED attendance), community pharmaceutical dispensing and community laboratory tests in the year prior to death. Cost estimates were based on the national cost weights in NZMJ 27 May 2011, Vol 124 No 1335; ISSN Page 41

3 Results Hospitalisation A total of 2290 deaths occurred in 2008 in CMDHB. In the 12- month period prior to death there were 6296 inpatient hospital events associated with 1835 people. Therefore there were 455 (20%) people who did not have a public hospital admission in the year prior to death. Malignant cancer had the highest number of hospitalisations partly because malignant cancer was associated with the highest number of disease specific readmissions (average 3.4) (see Table 2). Table 2. The number of hospitalisations in the last year of life of people who died in 2008 by disease category Diagnostic category Number of hospital admissions Number of people Average number of disease-specific hospitalisations per patient Cardiovascular disease Malignant cancer Chronic respiratory disease Chronic liver disease Chronic renal failure All other causes As noted, this study assigned only one disease diagnostic category to each of the inpatient event based on the order of the discharge diagnostic codes. Table 3 describes the number of people who had different disease categories of inpatient hospitalisations. Many people have more than one disease that had contributed to the inpatient events. For example, 651 people had 3010 hospitalisations in the last year of life falling into two different disease categories. The more diagnoses a person has, the higher the number of hospitalisations occurring in the last year of life. For example, 10 people with 4 different diagnosis categories apiece had a total of 94 inpatient events (an average of 9.4 admissions per person). NZMJ 27 May 2011, Vol 124 No 1335; ISSN Page 42

4 Table 3. Hospitalisation number in the last year of life stratified by the number of different chronic disease categories per person Number of hospitalisations with different disease categories Number of people Total number of hospitalisations Average number of hospitalisations per patient Total Proportion of deaths that occurred in a publicly funded hospital Overall, 40% of all deaths in CMDHB occurred in a publicly funded hospital. The proportion of deaths that occurred in hospital varies with age. The highest was in the under-5 age group, with more than 70% of all deaths occurring in a hospital. Figure 1. Percentage of all deaths in CMDHB in 2008 that occurred in a publicly funded hospital stratified by age NZMJ 27 May 2011, Vol 124 No 1335; ISSN Page 43

5 Length of stay Of those 1835 people who had a hospital admission in the last year of life, the mean and median cumulative length of stay over the year were 20.6 and 13.0 days respectively. There were 125 people who had hospital admissions but did not have an overnight stay, i.e. length of stay = 0. The total length of hospital stay in the year prior to death varies widely between individuals ranging from 0 to 313 with a standard deviation of 27.9 days. Table 4. Statistical analyses of the total length of hospital stays in the last year of life of people who died in 2008 Length of hospital stay analyses Number of people 1835 Mean 20.6 Standard Error 0.7 Median 13.0 Standard Deviation 27.9 Minimum 0 Maximum 313 Outpatients, pharmaceutical and laboratory service utilisation The number of people who utilised the service and the volume of service utilised are shown in Table 5. For those people who attended an outpatient clinic, the average number of clinics attended in the last year of life was Table 5. Outpatients, pharmaceutical and laboratory service utilisation in the last year of life Type of service Number of people who utilised the service (% out of total 2290 people in study) Volumes of service used Average number of service per patient in the last year of life Outpatients 1935 (84%) 24,866 clinics 12.9 clinics Pharmaceutical 2092 (91%) 177,102 prescription items dispensed 84.7 prescription items dispensed Laboratory 1967 (86%) 85,257 individual lab tests 43.3 individual lab tests Healthcare cost in the last year of life CMDHB spent a total of $51.2 million on health care for the 2290 people who died in 2008 during their last year of life. This consisted of $38.8 million on inpatient hospitalisations, $7.8 million on outpatients, $4 million on community-dispensed pharmaceuticals and $680,000 on community laboratory tests. While the average health care cost per person in the last year of life was $22,376 per person, the range of health care costs spent varied widely (Table 6). There were 69 people who did not access any of health care services recorded by the study in their last year of life. On the other hand, there were 61 people (2.7%) who had health care NZMJ 27 May 2011, Vol 124 No 1335; ISSN Page 44

6 costs greater than $100,000 in the last year of life, accounting for a total of 8.7 million (17% of the total cost). Table 6. The health care cost per person in the last year of life Total health care cost per person Mean $22,376 Standard Error $666 Median $13,412 Standard Deviation $31,859 Range $782,111 Sum $51,200,000 Number of people 2,290 The total health care cost by age groups The average health care cost per person in the last year of life varies by age (Figure 2). Children from 28 days to 9 years, and adults between the ages 50 and 79 years are associated with the highest health care cost (blue line in Figure 2). The health care cost in the last year of life progressively falls after 80 years of age. Figure 2. The number of deaths in CMDHB in 2008 and the average health care cost per person in the last year of life stratified by age category (error bars: 95% confidence interval) NZMJ 27 May 2011, Vol 124 No 1335; ISSN Page 45

7 Hospitalisation cost There were 1835 people (80%) who received inpatient care in the last year of life in 2007/08. CMDHB spent just under $38.8 million on inpatient hospitalisations for this group. Inpatient care related to cancer was associated with the highest average inpatient cost in the last year of life. Note that the overall average cost ($21,100) per patient who utilised inpatient services was higher than the average cost per patient associated with any of specific diagnostic category because one person can have multiple hospitalisations with different diagnoses (Table 7). Table 7. The hospitalisation costs related to last year of life by disease category Diagnostic category Average cost per hospital admission ($) Cost over the last year of life per patient who had utilised inpatient services ($) Number of patients Total cost by disease category ($) Cardiovascular , ,520,000 disease Malignant cancer , ,636,000 Chronic respiratory , ,548,000 disease Chronic liver , ,000 disease Chronic renal , ,106,000 failure All other causes , ,488,000 Overall (people who had hospitalisation) ,100 1,835 38,777,000 Outpatient, pharmaceutical and laboratory costs in the last year of life There were 1935 people who had utilised outpatient services in the last year of life. The average cost per patient over the year was about $4000. Table 8. The average outpatient, pharmaceutical and laboratory costs per patient in the last year of life Type of service Outpatients Pharmaceutical Laboratory Number of people who utilised the service Total cost of service ($) 7,785,000 3,999, ,000 Average cost per patient who utilised the service ($) Outpatients, pharmaceutical or laboratory databases do not have formal diagnosis coding. The diagnostic category in Table 9 refers to the discharge diagnosis of people who had at least one inpatient hospitalisation event within the last year of life; linkage was then made by encrypted NHI to their outpatient, pharmaceutical and laboratory costs. For example, there were 818 patients who had an inpatient event with a diagnosis of cardiovascular disease, and the average outpatient, pharmaceutical and laboratory costs for these patients were $4700, $2000, and $340 respectively. People NZMJ 27 May 2011, Vol 124 No 1335; ISSN Page 46

8 with chronic renal failure had the highest outpatient, pharmaceutical and laboratory costs. Table 9. The average outpatient, pharmaceutical, and laboratory cost in the last year of life by disease category Diagnostic category Number of patients Average cost per patient ($) Outpatients Pharmaceutical Laboratory Cardiovascular disease Malignant cancer Chronic respiratory disease Chronic liver disease Chronic renal failure , All other causes People who had inpatient hospitalisation Overall (total cohort) Discussion People in their last year of life had a high level of health service utilisation in 2007/08. Just over 80% of people had at least one publicly funded inpatient hospital stay in the last year of life. Forty percent of all deaths in 2008 in CMDHB occurred in a publicly funded hospital. More than 75% of the health care costs in the last year of life were related to inpatient hospitalisations. The average cumulative length of inpatient stay over the year was 20.6 days. Outpatient, pharmaceutical, and laboratory services were received by 84%, 91%, and 86% of people respectively in their last year of life. There were 69 people (3%) who did not attend any of the services examined in the study in the last year of life. This observation is likely to be related to people who had sudden deaths (e.g. car accidents), and/or people who did not engage with the health system at all. The average health care cost per person in last year of life is high in CMDHB. A CMDHB report suggested that the age standardised health care cost in the last year of life may be seven or more times higher than the average annual health cost in people not in the last year of life. 11 The proportion of all deaths that occurred in hospital (40%) in CMDHB is roughly similar to the other developed countries: 36.6% in the US and 50.3% in the UK. 12 As shown in Figure 2 and Table 7, the health care costs in the last year of life varied widely between individuals, disease categories and age ranges. People who had hospitalisations related to cancer had the highest average hospitalisation cost per person ($18,200). People who had hospitalisations with chronic renal failure had the highest outpatient costs, presumably related to outpatient dialysis. Overall in 2008 Counties Manukau District Health Board spent at least $51m on its residents in their last year of life around 5% of its overall budget. In the subgroup analyses by age range, the average health care costs in last year of life were highest in young children between 28 days and 9 years and adults in the NZMJ 27 May 2011, Vol 124 No 1335; ISSN Page 47

9 years age group, and the health care costs subsequently dropped with advancing age from 80 year old onwards. The common causes of death in young children in CMDHB include extreme prematurity, congenital anomalies, cancer, sudden unexplained death in infants (SUDI, formerly known as SIDS) and injury and poisoning. 13 The high end of life costs of the young children may be related to the former three conditions. The observed gradual fall in health care costs with advancing age is consistent with other international studies. 5,14,15 Reasons for this are likely to include: Age is a good proxy for prognosis. 14 The balance between potential benefit and likely morbidity from an intervention is often less favourable in people who are older or have a poor prognosis. Individuals and their families being less likely to want significant interventions the later they are in life ( I ve had a fair innings ). If a simple cost utility analysis was undertaken, the results could be somewhat alarming. At a time when the quality of life is often far from perfect, a small proportion of people (2.7% of the cohort) who had health care cost greater than $100,000 accounted for significant proportion (17%) of the total cost of people in the last year of life. However, results from such cost utility analysis should not be taken on face value only, because the clinical decisions relating to any health service provision (including end of life care) are always made in a prospective manner. Predicting prognosis and benefits from interventions is often uncertain and the decision to provide high cost health services might be appropriate when the decision was made given the available information at the time. Therefore, it would be inappropriate to use a retrospective analysis after the fact of death to solely determine whether the health care services provided were appropriate or not. Nevertheless, evidence from overseas studies suggest that the end of life costs in people even with perceived poor prognosis still remained very high, even though the end of life spending is less in people who had a higher estimated risk of death. 16 Furthermore, the amount of health services utilised towards the end of life has been shown to be subject to variations in local clinical practice and/or policy that are not explained by disease prevalence and severity. The Dartmouth Atlas Project demonstrated there are marked variations in the length of stay in inpatient hospitalisations, and intensive care units during the last 6 months of life in the US. 9 The main reason for the variations in care between 93 integrated academic medical centres is related to the level of supply sensitive care that was provided, while severity or prevalence of illness accounted for little of the variation. Supply sensitive services refer to services where the availability of a specific resource had a major influence in utilisation rates, e.g. the number of intensive care beds. Disconcertingly, the project found little evidence to suggest the higher volume of services provided had lead to improvement in health outcomes. In fact, aggressive management in people who have poor prognosis can be associated with more adverse outcomes such as more physical distress, and worse overall quality of death as reported by the caregiver. 9,17 The provision of an intervention that has NZMJ 27 May 2011, Vol 124 No 1335; ISSN Page 48

10 little or remote chance of prognostic benefit may result in unnecessary suffering for the patient in terms of side effects. In some cases, it may be more preferable to redirect the resources of such interventions to provide a better end of life care to the individual. In the context where the current trends of the health care expenditure increase in New Zealand are not sustainable in the long term, 18 high cost interventions provided towards the end of life should be carefully considered based on clinical factors, patients expectations and cost utility of interventions. Health care resources are always finite. Every clinical decision is actually also a resource decision. The cost utilities of various available treatments in different patient groups are often not explicitly compared. However, the New Zealand Medical Council expects that as a part of clinical practice, doctors will balance their duty of care to each patient with their duty of care to the population. 19 The decisions to initiate a high cost or invasive treatment in patients with poor prognosis can certainly be challenging. In some circumstances, the decision making process may be assisted by guidelines. However, the decisions to withdraw treatment are phenomenally difficult particularly in patients who would no longer be eligible to have the treatment had the person not started treatment already or the decision to withdraw treatment will lead to death in the immediate future, e.g. the decision to stop dialysis. As demonstrated by this study, people in their last year of life often have multiple chronic conditions. Clinicians should be supported in taking a more integrated approach in assessing the patients prognosis based on all the co-morbidities rather than providing a prognosis for a specific condition. A regular forum with contributions from multi-disciplinary and multi-speciality teams to discuss these ethical questions may be appropriate in challenging cases. The strength of this study is that the data analysed were derived from the routinely collected national datasets in New Zealand. As it is a complete data set, there are no sampling errors or difficulties with generalising to the whole population. The methods can be easily replicable to provide a regional comparison within New Zealand or provide time trends in health care utilisation in the future for monitoring or evaluating purposes. However, a limitation of this study is that it did not include the health care services that are not captured by the routinely collected datasets. The health care costs related to primary health care, inpatient and outpatient hospice care, pharmaceutical co-payments or health services that are funded privately in the last year of life were not included. Furthermore, the significant costs of informal care provided by family and friends were also not included. 20 The sub-grouping by clinical condition should be interpreted with caution as it was created in an empirical manner from hospital disease coding rather than a true clinical review. Since one person may be classified into more than one disease category, the non-inpatient hospital costs should be interpreted with caution. For example, not all of the outpatient, pharmaceutical, and laboratory costs for the 818 people discharged with a prioritised diagnosis of cardiovascular disease would be related to cardiovascular disease (Table 9). NZMJ 27 May 2011, Vol 124 No 1335; ISSN Page 49

11 Conclusion Consistent with the international literature, this study found that CMDHB residents in the last year of life have a high level of health service utilisation. People often have multiple chronic diseases in the last year of life. Providing health services for patients in the last year of life is associated with high health care costs. The majority of the health care cost is related to inpatient care. Decisions about the appropriate use of high cost health services in people towards the end of life can be extremely challenging. These decisions are resource allocation decisions as well as clinical decisions and should be based on clinical factors, cost utilities, and patient, family, and society s expectations. Competing interests: None. Author information: Wing Cheuk Chan, Public Health Physician; Gary Jackson, Former Clinical Director; Doone Winnard, Public Health Physician; Philippa Anderson, Public Health Physician/Child Health Medical Officer; Planning and Funding, Counties Manukau District Health Board, Manukau, South Auckland Funding: This study was undertaken as a result of work undertaken in the Planning and Funding team for Counties Manukau District Health Board (CMDHB). All authors were paid employees of CMDHB at the time of the study. Acknowledgements: We thank Dean Papa at CMDHB for his assistance with the data extraction and record linkage. Correspondence: Wing Cheuk Chan, Public Health Physician, Planning and Funding, CMDHB, Manukau. Private Bag 94052, South Auckland Mail Centre, New Zealand. wingcheuk.chan@cmdhb.org.nz References: 1. Pot AM, Portrait F, Visser G, Puts M, van Groenou MI, Deeg DJ. Utilization of acute and long-term care in the last year of life: comparison with survivors in a population-based study. BMC Health Serv Res 2009;9: Polder JJ, Barendregt JJ, van Oers H. Health care costs in the last year of life- the Dutch experience. Soc Sci Med 2006;63: Krahn MD, Zagorski B, Laporte A, et al. Healthcare costs associated with prostate cancer: estimates from a population-based study. BJU Int 2010;105: Thomas RE, Wilson D, Sheps S. A literature review of randomized controlled trials of the organization of care at the end of life. Can J Aging 2006;25: Hanchate A, Kronman AC, Young-Xu Y, Ash AS, Emanuel E. Racial and ethnic differences in end-of-life costs: why do minorities cost more than whites? Archives of Internal Medicine 2009;169: Yabroff KR, Lamont EB, Mariotto A, et al. Cost of care for elderly cancer patients in the United States. J Natl Cancer Inst 2008;100: Ferraz MB, Miranda IC, Padovan J, de Soarez PC, Ciconellil R. Health care costs in the last four years of life for private health plan beneficiaries in Brazil. Rev Panam Salud Publica 2008;24: Lang HC, Wu JC, Yen SH, Lan CF, Wu SL. The lifetime cost of hepatocellular carcinoma : a claims data analysis from a medical centre in Taiwan. Appl Health Econ Health Policy 2008;6: Wennberg JE, Fisher ES, Goodman DC, Skinner JS. Tracking the Care of Patients with Severe Chronic Illness: The Dartmouth Atlas of Health Care New Hampshire: The Trustees of Dartmouth College; NZMJ 27 May 2011, Vol 124 No 1335; ISSN Page 50

12 10. National Ethics Advisory Committee. Ethical Guidelines for Observational Studies: Observational research, audits and related activities. Wellington: Ministry of Health; Health care costs related to cardiovascular disease and diabetes in CMDHB in Counties Manukau District Health Board, (Accessed 2010, at Status.htm#costofCVD) 12. Wunsch H, Linde-Zwirble WT, Harrison DA, Barnato AE, Rowan KM, Angus DC. Use of intensive care services during terminal hospitalizations in England and the United States. Am J Respir Crit Care Med 2009;180: Craig E, Jackson C, Han DY. The Health of Children and Young People in Counties Manukau. Auckland: New Zealand Child and Youth Epidemiology Service; Shang B, Goldman D. Does age or life expectancy better predict health care expenditures? Health Econ 2008;17: Shugarman LR, Decker SL, Bercovitz A. Demographic and social characteristics and spending at the end of life. J Pain Symptom Manage 2009;38: Howard DH, Culler SD, Druss BG, Thorpe KE. The relationship between ex ante mortality risk and end-of-life medical costs. Appl Health Econ Health Policy 2006;5: Zhang B, Wright AA, Huskamp HA, et al. Health Care Costs in the Last Week of Life: Associations With End-of-Life Conversations. Arch Intern Med 2009;169: Ministerial Review Group. Meeting the challenge: enhancing sustainability and the patient and consumer experience within the current legislative framework for health and disability services in New Zealand. Wellington: Ministerial Review Group; Medical Council of New Zealand. Statement on safe practice in an environment of resource limitation. Wellington: Medical Council of New Zealand; Rhee Y, Degenholtz HB, Lo Sasso AT, Emanuel LL. Estimating the quantity and economic value of family caregiving for community-dwelling older persons in the last year of life. J Am Geriatr Soc 2009;57: NZMJ 27 May 2011, Vol 124 No 1335; ISSN Page 51